Scholastic Corp (NASDAQ: SCHL) reported Q1 EPS of ($1.16), $0.58 better than the analyst estimate of ($1.74). Revenue for the quarter came in at $215.2 million versus the consensus estimate of $219 million.

"The successful execution of our previously announced $100 million cost savings program significantly improved the Company\'s quarterly operating loss and cash used in operating activities year-over-year, and preserved our strong capital position. Scholastic\'s trade and education businesses performed well and remain positioned for further growth, and we are proud of the work we have done to deepen our digital connections with customers, with digital billings up 15% in the quarter," said Richard Robinson, Chairman, President and Chief Executive Officer. While the first quarter is not traditionally a significant quarter for the Compan\'s school-based distribution channels, the benefits realized from cost savings actions taken this quarter have improved our operations and should help mitigate lower revenue expectations for clubs and fairs in the second quarter as schools adapt to COVID-19 disruptions and delays. In addition, the cost savings measures should bring permanent improvements to the Company's cost structure and opportunities for substantial gains in profitability as normal sales levels return."

Fiscal 2021 Outlook

The Company has substantially completed work on lowering its cost base by $100 million, and believes that a significant portion of these cost savings, as well as new measures being taken, should continue to favorably impact future period results. The outlook for the Company's trade and education businesses remains positive with a robust frontlist of bestselling series and authors scheduled to release over the remainder of the fiscal year and Scholastic's digital education programs and digital-only magazines gaining momentum as schools look to learning solutions which can be used at school and at home. However, delays in club orders and fair bookings will likely lead to a significant decline in revenues in the Company\'s Children's Book Publishing and Distribution segment in the second quarter. The Company believes that business conditions should improve in the second half of its fiscal year as schools adjust to operational changes in response to COVID-19, and we expect increasing demand for the Company's slate of flexible new services, such as our virtual and shippable fair options and home delivery of club and fair orders, as well as our safe and easy in-person fairs. Given the variability in school schedules, as well as the possibility of new COVID outbreaks and their potential impact on schools, Scholastic is not providing a financial outlook for fiscal year 2021.

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